TIRATH SINGH AJMANI,MUMBAI vs. ITO 25(1)(5), MUMBAI

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ITA 169/MUM/2017Status: DisposedITAT Mumbai05 July 2017AY 2008-093 pages
AI SummaryRemanded

What did the Tribunal hold?

The CIT(A) confirmed the AO's addition. The Tribunal noted that the CIT(A) had not adjudicated on a specific ground challenging the applicability of Shri Mukesh Choksi's statement and the AO's reliance on it.

What were the facts?

The assessee claimed long-term capital gains from the sale of Zen Saving Ltd. shares as exempt. The AO treated the sale consideration as an unexplained cash credit, considering it an accommodation entry based on a statement from Shri Mukesh Choksi.

What were the issues?

Whether the CIT(A) erred in confirming the addition without adjudicating on the assessee's ground challenging the reliance on Shri Mukesh Choksi's statement and the AO's failure to provide a copy of the statement.

Which sections of the Income-tax Act were involved?

Section 10(38),Section 68,Section 143(3),Section 147,Section 131

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

For Appellant: Shri Hari S Raheja, AR
For Respondent: Shri TA Khan, DR

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SRI MAHAVIR SINGH, JM (A.Y:2008-09) Mr. Tirath Singh Ajmani Income Tax Officer 403/B-25, Queens Land CHS 25(1)(5) Ltd. Shastri Nagar, Andheri Pratykashkar Bavan BKC, Vs. (W) Bandra (E) Mumbai-400 053 Mumbai-400 051 PAN No.ADXPA1319G Appellant .. Respondent Assessee by .. Shri Hari S Raheja, AR Revenue by .. Shri TA Khan, DR Date of hearing .. 14-06-2017 Date of pronouncement .. 05-07-2017 O R D E R PER MAHAVIR SINGH, JM:

This appeal by the assessee is arising out of the order of CIT(A)-39, Mumbai, in appeal No. CIT(A)-39/IT 173/ITO 25(1)(5)/2015-16 dated 07- 10-2016. The Assessment was framed by ITO ward 25(1)(5)), Mumbai for the A.Y. 2008-09 vide order dated 27-02-2015 under section 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter ‘the Act’).

2.

The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in making addition of sale consideration of 17,500 shares of Zen Saving Ltd. as an accommodation entry as against long term capital gain declared by assessee. For this assessee has raised following grounds.

“1. On the facts and circumstances of the case and in law, the learned CIT(Appeal) erred in confirming the addition of Rs. 10,23,787/- as income from other sources rejecting the submission of the appellant that the same was arising out of sale of shares resulting in earning

Mr. Tirath Singh Ajmani A.Y:08-09 of exempt Long Term Capital Gain not liable to income tax.

5.

On the facts and circumstances of the case and in law, the learned CIT(Appeal) erred in merging all the grounds of the appeal filed before him and not adjudicating on Ground No.4 of the appeal filed before him wherein appellant had challenged the applicability the statement of Shri Mukesh Choksi relied upon by the Assessing Officer in view of no admission by him of the involvement of the appellant in such nefarious transactions as admittedly confessed by Shri Mukesh Choksi. ”

3.

Brief facts are that according to AO the assessee has purchased bogus long term capital gain of Rs. 9,81,407/- on sale of shares of Zen Saving Ltd. and claimed the same as exempt u/s 10(38) of the Act. According to AO Shri Mukesh Choksi admitted that he is issuing accommodation entries through third party cheques to various beneficiaries against receipt of cash. The AO considering all the facts and circumstances treated the entire sale consideration as unexplained cash credit and added u/s 68 of the Act. Aggrieved, assessee preferred the appeal before CIT(A), who also confirmed the action of the AO. Now Before me, the learned Counsel for the assessee made only one request that the CIT(A) has not adjudicated the ground no.4 of appeal find before him wherein assessee has challenged the applicability of statement of Shri Mukesh Chokshi. On query from the Bench, the learned Sr. DR fairly conceded that the issue can be remitted back to the file of the CIT(A) for adjudication of this ground.

4.

In term of the above, I remand the matter back to the file of the CIT(A) to decide ground No. 4 of appeal raised before him by the assessee. The relevant ground No.4 reads as under: -

Mr. Tirath Singh Ajmani A.Y:08-09 “4. On the facts and circumstances of the case and in law, the learned Assessing Officer failed to provide the copy of the statement of Shri Mukesh Manekal Choksi recorded u/s 131 of the Income Tax Act on 16.01.2013, wherein he is alleged to have admitted that one of the beneficiaries for accommodation entries is Shri Tirath Singh Ajmani.”

In view of the above, I remand this issue back to the file of CIT(A) to decide this ground No.4 after allowing reasonable opportunity of being heard to the assessee.

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